A report published by Bloomberg Friday showed the Boston, Massachusetts-based company will start the sale process by next month, with Credit Suisse Group as consultant. However, it will still leave all options open, including retaining the business.
GE is planning to sell its power-conversion division for half the price at which it was acquired a few years ago
It is expected that CEO John Flannery, who embarked on a massive restructuring program after taking the reins of GE last year, will get rid of more assets in the future, ultimately reducing the firm to the power and aviation businesses. Flannery aims to regain GE’s market value, which fell about $167 billion since the beginning of 2017 amid a crippling liquidity crisis and a general slump in the power sector.
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He has already achieved some progress towards meeting the goal of reducing debt by $25 billion, through a series of divestitures including the company’s century-old locomotive business, health unit and industrial gas-engine business. Meanwhile, options are being explored to monetize its controlling stake in oilfield technology firm Baker Hughes.
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Interestingly, some of the business units being axed by Flannery were either developed or acquired by former chief Jeffrey Immelt before leaving the company last year.
GE shares plunged 26% since the beginning of the year after losing nearly 50% last year, eventually costing the company its membership in the Dow Jones Industrial Average. The stock, which continued the free fall in the recent months, ended Friday’s trading session down 2%.
